The Sky Blue Corporation has the following adjusted trial balance at December 31. Debit Credit Cash $ 1,400 Accounts Receivable 3,700 Prepaid Insurance 4,000 Notes Receivable (long-term) 4,700 Equipment 20,500 Accumulated Depreciation $ 6,000 Accounts Payable 7,120 Salaries and Wages Payable 1,850 Income Taxes Payable 4,600 Unearned Revenue 940 Common Stock 4,100 Retained Earnings 1,680 Dividends 470 Sales Revenue 57,330 Rent Revenue 470 Salaries and Wages Expense 25,000 Depreciation Expense 3,000 Utilities Expense 5,920 Insurance Expense 3,100 Rent Expense 7,700 Income Tax Expense 4,600 Total $ 84,090 $ 84,090 Prepare closing journal entries on December 31. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Explanation:

The closing journal entries are as follows

1. Sales Revenue A/c Dr $57,330

  Rent Revenue A/c Dr $470

                 To Income Summary $57,800

(Being revenue account closed)

2. Income summary A/c Dr $49,320

         To Depreciation expense A/c $3,000

         To Salaries and Wages Expense A/c $25,000

         To Utilities Expense A/c $5,920

         To Insurance Expense A/c $3,100

         To Rent Expense $7,700

         To Income tax expense A/c $4,600

(Being expenses accounts are closed)

3. Income summary A/c Dr $8,480   ($57,800 - $49,320)

           To Retained earning A/c $8,480

(Being the difference is credited to retained earning)

4. Retained earnings A/c Dr $470

                   To Dividend A/c $470

(Being dividend account is closed)

For all other account, no journal entries  are required

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